Virginia: State Implements Prevailing Wage Statute and Amends Wage Theft Law

APPLIES TO

All Employers with VA Employees

EFFECTIVE

January 4, 2022

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Prevailing Wage Statute. Contractors and subcontractors working on state public projects must pay prevailing wage rates to any mechanic, laborer, or worker who provides service in connection with the public project. Contractors must certify the pay scale used for each craft or trade employed under the public contract when the contractor is awarded a contract. Further, contractors will be required to preserve records related to compensation, classification, and hours worked for each worker for a minimum of six years.

The prevailing wage rate is defined as a product of (1) the geographic area where work on a covered public project is performed and (2) the class of workers to which the rate applies. The Virginia Commissioner of Labor and Industry will determine prevailing wage rates based upon rates set by the U.S. Secretary of Labor. The contractor must post the general prevailing wage rate for each craft and classification involved in the public project in a prominent location.

Contractors who violate the statute may be liable to pay workers outstanding wages plus interest and are disqualified from bidding on contracts until owed restitution is paid. Willful violation of the statute subjects the contractor to further penalties, and provides interested parties (e.g., a bidder, contractor, operator, etc.) an opportunity to challenge or protect a bid specification, project agreement, or other public contract that violates the statute.

Wage Theft Law. Previously, in the event a general contractor knew or should have known that a subcontractor or supplier was not paying employees all wages owed, the employees of that subcontractor or supplier may bring a lawsuit against the general contractor. The general contractor can be held jointly and severally liable for wage payment violations of its subcontractor or suppliers.

The amended Wage Theft Law offers some relief: (1) a general contractor will not be held jointly and severally liable for wage payment violations by suppliers that exclusively furnish materials; (2) written certification from the subcontractor attesting, to the best of their knowledge, that the subcontractor has paid all owed wages and all sub-subcontractors have also paid owed wages, will serve as evidence of the general contractor’s compliance with the wage theft law; and (3) where a subcontractor falsifies such certification, the general contractor may hold the subcontractor civilly liable.

Action Items

Update payroll with required prevailing wage.
Update document retention policies.
Establish practice of obtaining appropriate certification from subcontractors in compliance with Wage Theft Law.
Display required prevailing wage notice.
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Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.